Amended in 2019 and 2023, the Judicial Reorganisation Procedure (JRP) has now become a central pillar in aiding distressed businesses. In fact, it has been so successful that plans are now afoot to extend the associated aid scheme.
A forced cessation of operations is always a difficult period. The economic consequences and emotional strain are made still more onerous by the inevitable legal procedures which add an additional financial burden – a situation of which the Brussels government is well aware. An aid scheme was therefore created in 2021 that covers 75% of the costs incurred during mediation or linked to the preparation of a JRP. This scheme, administered by the Centre for Companies in difficulty (CCd), has been extremely successful. Here, we talk to Wassima Hadi, CCd advisor.
Have distressed entrepreneurs taken advantage of the scheme?
Absolutely, particularly since 2023, and even more in 2024. Previously, these companies were still inclined to adopt other approaches, such as a moratorium on bankruptcy or assistance measures. But the gradual disappearance of these options has increased demand. We currently have 100 cases either in progress or closed, and our budget is now entirely allocated. It should be said that we have made great efforts to publicise the scheme, with considerable assistance from a steering committee involving bodies such as the French-speaking Business Court of Brussels, with which we are working closely on a potential renewal.
Have all the cases received resulted in a JRP?
No, because such a procedure must be preceded by a financial analysis. This analysis in turn requires the submission of a balance sheet no older than three months, together with the final balance sheet for the previous period. However, distressed companies are sometimes in dispute with their accountants and do not have access to all of the necessary information.
And have there been any success stories?
There have been many. The amended JRP genuinely helps companies to extricate themselves from difficulties. The rescue rate is 30%, even if we exclude support measures, which would increase this figure even more. The key is to face the problem and to talk about it in time, allowing the company to choose the best path – which may also be mediation.